Hostname: page-component-586b7cd67f-g8jcs Total loading time: 0 Render date: 2024-11-22T19:05:57.217Z Has data issue: false hasContentIssue false
  • English
  • Français

STATES OF NATURE AND THE NATURE OF STATES

Published online by Cambridge University Press:  09 June 2016

Edi Karni
Edi Karni*
Affiliation:
Department of Economics, Johns Hopkins University, 34th and Charles St. Baltimore, MD 21218, USA and Warwick Business School, University of Warwick, Coventry, CV4 7AL, UK. Email: [email protected]. URL: http://econ.jhu.edu/directory/edi-karni/
Get access Rights & Permissions [Opens in a new window]

Abstract:

This paper discusses the definition of the state space and corresponding choice sets that figure in the theory of decision making under uncertainty. It elucidates an approach that overcomes some conceptual difficulties with the standard models and accommodates a procedure for expanding the state space in the wake of growing awareness.

Keywords

States of naturedecision making under uncertaintyresolution of uncertaintychoice setunawareness
Type
Articles
Information
Economics & Philosophy , Volume 33 , Issue 1 , March 2017 , pp. 73 - 90
Check for updates
Copyright
Copyright © Cambridge University Press 2016 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

REFERENCES

Ahn, D. S. and Ergin, H.. 2010. Framing contingencies. Econometrica 78: 655–695.Google Scholar
Anscombe, F. J. and Aumann, R. J.. 1963. A definition of subjective probability. Annals of Mathematical Statistics 43: 199–205.Google Scholar
Arrow, K. J. 1971. Essays in the Theory of Risk Bearing. Chicago, IL: Markham Publishing Co.Google Scholar
Aumann, R. J. 2000. Collected Papers. Cambridge, MA: MIT Press.Google Scholar
Borel, É. 1924. A propos d'un traité de probabilités. Revue Philosophique 98: 321–336. (Translated in Studies in Subjective Probability, ed. Kyburg, H. E. and Smokler, H. E.. 1964. New York, NY: John Wiley and Sons.)Google Scholar
Chambers, C. P. and Hayashi, T.. 2015. Reverse Bayesianism: a comment. Unpublished manuscript.Google Scholar
de Finetti, B. 1937. La Prévision: Ses lois logiques, ses sources subjectives. Annales de l'Institut Henri Poincare 7: 1–68. (Translated in Studies in Subjective Probability, ed. Kyburg, H. E., and Smokler, H. E.. 1964. New York, NY: John Wiley and Sons.)Google Scholar
Drèze, J. H. 1987. Essays on Economic Decisions under Uncertainty. Cambridge: Cambridge University Press.Google Scholar
Epstein, L., Marinacci, M. and Seo, K.. 2007. Coarse contingencies and ambiguity. Theoretical Economics 2: 355–394.Google Scholar
Fishburn, P. C. 1970. Utility Theory for Decision Making. New York, NY: John Wiley and Sons.Google Scholar
Gibbard, A. and Harper, W. L.. 1978. Counterfactuals and two kinds of expected utility. In Foundations and Applications of Decision Theory, vol. 1, 125–162. Dordrecht: Reidel Publishing Co.Google Scholar
Gilboa, I. 2009. Theory of Decision Making under Uncertainty. Cambridge: Cambridge University Press.Google Scholar
Gilboa, I. and Schmeidler, D.. 1995. Case-based decision theory. Quarterly Journal of Economics 110: 605–639.Google Scholar
Gilboa, I., Pestlewaite, A. and Schmeidler, D.. 2009. Is it always rational to satisfy Savage's axioms? Economic and Philosophy 25: 285–296.Google Scholar
Karni, E. 2009. A mechanism for eliciting probabilities. Econometrica 77: 603–606.Google Scholar
Karni, E. 2011. A theory of Bayesian decision making with action dependent subjective probabilities. Economic Theory 48: 125–146.Google Scholar
Karni, E. and Schmeidler, D.. 1991. Utility theory with uncertainty. In Handbook of Mathematical Economics, Vol. IV, ed. Hildenbrand, W. and Sonnenschein, H.. Amsterdam: Elsevier Science.Google Scholar
Karni, E. and Vierø, M-L.. 2013. “Reverse Bayesianism”: a choice-based theory of growing awareness. American Economic Review 103: 2790–2810.Google Scholar
Karni, E. and Vierø, M-L.. 2015a. Probabilistic sophistication and reverse Bayesianism. Journal of Risk and Uncertainty 50: 189–208.Google Scholar
Karni, E. and Vierø, M-L.. 2015b. Awareness of unawareness: a theory of decision making in the face of ignorance. Unpublished manuscript.Google Scholar
Kreps, D. M. 1979. A representation theorem for ‘preference for flexibility’. Econometrica 47: 565–576.Google Scholar
Kreps, D. M. 1992. Static choice in the presence of unforeseen contingencies. In Economic Analysis of Markets and Games: Essays in Honor of Frank Hahn, ed. Dasgupta, P., Gale, D., Hart, O. and Maskin, E., 258–281. Cambridge, MA: MIT Press.Google Scholar
Kreps, D. M. 2013. Microeconomic Foundations I. Princeton, NJ: Princeton University Press.Google Scholar
Machina, M. J. 2003. States of the world and the state of decision theory. In The Economics of Risk, ed. Meyer, D. and Upjohn, W.E.. Institute for Employment Research.Google Scholar
Quine, W. V. 1948/1949. On what there is. Review of Metaphysics 2: 21–38.Google Scholar
Ramsey, F. P. 1926. Truth and probability. (Published in Braithwaite, R. B. and Plumpton, F.. 1931. The Foundation of Mathematics and Other Logical Essays. London: Routledge and Kegan.)Google Scholar
Savage, L. J. 1954. The Foundations of Statistics. New York, NY: John Wiley and Sons. (Second revised edition 1972.)Google Scholar
Schmeidler, D. and Wakker, P.. 1987. Expected utility and mathematical expectation . In The New Palgrave: A Dictionary of Economics, ed. Eatwell, J., Milgate, M. and Newman, P.. London: Macmillan Press.Google Scholar
Stalnaker, R. C. 1972 [1981]. Letter to David Lewis. In IFS Conditionals, Beliefs, Decision, Chance, and Time, ed. Harper, W. L., Stalnaker, R. C. and Pearce, G.. Dordrecht: Reidel Publishing.Google Scholar